How to Start a Nonprofit Corporation in Tennessee (2024 Guide)


Steve Bennett
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Start a Nonprofit Corporation in Tennessee

If you would like to form a corporation in Tennessee, you should also consider starting a nonprofit corporation since it plays a crucial role in our society, addressing a wide range of community needs and positively impacting countless lives. Starting a nonprofit corporation in Tennessee can be rewarding, but it requires careful planning, dedication, and a thorough understanding of the various legal and financial requirements.

This comprehensive guide will walk you through Starting a Nonprofit Corporation in Tennessee, from initial planning to ongoing compliance, so that you can make a meaningful difference in your community.

If you want to know more about nonprofit corporations, you may read the whole article until the end, which the Webinarcare Editorial Team had thorough research. Before starting a nonprofit corporation in Tennessee, you must cross-check all the factors and be guided by the steps.

What is a Nonprofit Corporation?

A nonprofit corporation is a legal entity formed under a given state’s specific laws and regulations in the United States. It is created to serve a public or mutual benefit rather than generating profits for its owners or shareholders. Nonprofit corporations typically operate in education, healthcare, social services, arts and culture, and environmental conservation.

In a nonprofit corporation, any surplus income the organization generates is reinvested into its programs and services rather than distributed to shareholders or members. This allows nonprofits to focus on fulfilling their mission and addressing community needs without the pressure to maximize profits.

An example of a nonprofit corporation in Tennessee is Second Harvest Food Bank of Middle Tennessee – Distributes food to those in need across 46 counties in central and western Tennessee..

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Steps on How to Start a Nonprofit Corporation in Tennessee

To start a nonprofit corporation in Tennessee, you must follow the below steps that, include research and planning, choosing a corporate name, appointing directors, filing for Charter for Profit Corporation, creating corporate bylaws, holding the initial board of directors, issuing stock, obtaining required licenses and permits, registering with state tax agencies, Annual reporting and ongoing compliance. All these steps are basic ones. It can be changed depending on the type of corporation you form and the nature of your business.

Step 1: Research and Planning

Before starting your nonprofit corporation in Tennessee, you must research and plan. This stage is critical to the success of your nonprofit, as it will help you refine your mission, identify potential supporters, and avoid pitfalls. By conducting thorough research and developing a well-informed plan, you can establish a nonprofit corporation that makes a real difference in the lives of those you serve.

Step 2: Choose a Name for the Nonprofit

Once you have a clear vision for your Tennessee nonprofit corporation, it’s time to choose a name. Your organization’s name should be unique, memorable, and reflective of your mission and purpose. Follow these steps to choose and register your nonprofit’s name in Tennessee:

Consider the Mission and Purpose when Choosing the Name

Your nonprofit’s name should be closely tied to its mission and purpose, making it clear to potential supporters what your organization is about. Choose a name that is meaningful and easy to remember, as this will help with marketing and fundraising efforts.

Check for Name Availability with the Tennessee Secretary of State

Before registering your nonprofit’s name, you must ensure another organization still needs to use it in Tennessee. You can do this by checking the Tennessee Secretary of State ‘s online database or contacting their office directly.

Register the Name

Depending on your Tennessee ‘s requirements, you may need to register your nonprofit’s name with the Secretary of State. This typically involves completing a name reservation of 4 months or registration form and paying an online reservation fee of $20, and mail reservation fee of $20. Be sure to follow your state’s specific guidelines and procedures for name registration.

To check the availability of your desired corporate name, you can search the Tennessee Secretary of State’s business name database and Tennessee Business Name Search.

If your nonprofit corporation plans to operate under a name other than its legal name, you may also need to register a fictitious or “doing business as” (DBA) name.

The DBA filing can be done by two methods, by mail and in person., which costs around Varies by county. In addition, the DBA’s validity in Tennessee is five years, which you can file in Tennessee Secretary of State.

You can check out How to File a DBA in Tennessee for clearer understanding.

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Step 3: Hire a Registered Agent

Hiring a Registered Agent is essential in starting a nonprofit corporation. Registered Agent is a person or company responsible for receiving important legal documents, tax notices, and other correspondence for your nonprofit corporation. They ensure that your nonprofit corporation remains compliant with state regulations and requirements. There are Tennessee Registered Agent Services to check in forming Tennessee Nonprofit Corporation.

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Step 4: Establish Governance and Bylaws

With your nonprofit’s name in place, it’s time to establish your organization’s governance structure and create bylaws. These important documents will outline how your nonprofit will be run, including the roles and responsibilities of board members, the decision-making process, and the procedures for managing finances and record-keeping.

  • Choose the Initial Board of Directors: Your nonprofit’s board of directors will guide your organization’s activities and ensure its long-term success. Choose individuals passionate about your mission, bring diverse skills and expertise to the table, and are willing to commit the time and effort needed to fulfill their responsibilities as board members. In Tennessee, you need to have at least Three directors for you to operate a nonprofit corporation.
  • Create Bylaws: Your bylaws are the governing document for your nonprofit, outlining the roles and responsibilities of board members, the decision-making process, and the procedures for managing finances and record-keeping. Be sure to cover board meetings, voting, committees, officer positions, conflicts of interest, and amendment procedures. Your bylaws should be tailored to your organization’s needs and requirements and developed in consultation with an attorney experienced in nonprofit law.
  • Hold the First Board Meeting: Once your bylaws have been drafted, hold your first board meeting to review and approve them. This meeting should also include the election of officers, such as the president, vice president, secretary, and treasurer. Be sure to document the meeting’s discussions and decisions in meeting minutes, as these records will be important for maintaining your nonprofit’s legal compliance.

Step 5: Incorporate the Nonprofit

The next step in starting your Tennessee nonprofit corporation is to formally incorporate your organization with the Tennessee Secretary of State. Incorporation establishes your nonprofit as a separate legal entity and provides limited liability protection for its board members and officers. To incorporate your nonprofit, follow these steps:

Prepare the Charter for Profit Corporation

The Charter for Profit Corporation is the legal document formally establishing your nonprofit corporation. This document should include your organization’s name, purpose, Registered Agent, and principal office address. Be sure to follow your state’s specific requirements for the content and format of the Charter for Profit Corporation.

File the Charter for Profit Corporation

Once your Charter for Profit Corporation is complete, please submit them to the Tennessee Secretary of State’s office, along with any required filing fees. The filing process may vary depending on your state, but it typically involves mailing or submitting the documents online. Keep a copy of the filed Charter for Profit Corporation for your records.

Filing Charter for Profit Corporation in Tennessee may be done with four methods that are e-filing, by email, by mail and in-person. The Charter for Profit Corporation fee may vary from different state. However, in Tennessee, it costs $100 for online and by mail filing.

  • Online Filing: Create an account/Log in to the SOS site, get the e-form, fill it, and submit online. Or get the online PDF, fill it up and upload it back on the site.
  • Offline filing: Send the form by mail to or drop it off in person at Corporate Filings, 312 Rosa L. Parks Avenue, 6th Floor, William R. Snodgrass Tower, Nashville, Tennessee 37243

Step 6: Apply for State and Federal Tax Exemptions

Your organization may be eligible for state and federal tax exemptions as a nonprofit corporation. Obtaining tax-exempt status can save your nonprofit money and make it more attractive to potential donors. To apply for tax exemptions, follow these steps:

Obtain an Employer Identification Number (EIN)

An EIN in Tennessee is a unique number the Internal Revenue Service (IRS) assigns to your organization. You’ll need this number to apply for tax-exempt status and open a bank account for your nonprofit. You can obtain an EIN by completing the online application on the IRS website or submitting Form SS-4 by mail or fax.

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Apply for Federal Tax-Exempt Status (501(c)(3))

To apply for federal tax-exempt status, you’ll need to complete and submit Form 1023 or Form 1023-EZ, depending on the size and complexity of your organization. This application requires detailed information about your nonprofit’s finances, governance, and programs. Be prepared to provide supporting documentation, including your bylaws, Charter for Profit Corporation, and financial projections. You’ll also need to pay a filing fee, which varies depending on the size of your organization and the form you submit.

Apply for Tennessee Tax-Exempt Status

In addition to federal tax-exempt status, your nonprofit may be eligible for state tax exemptions. The process for applying for state tax-exempt status varies by state, so research your specific state’s requirements and procedures. This may involve submitting additional forms, documentation, and fees to the Tennessee Department of Revenue.

Step 7: Obtain the Necessary Licenses and Permits

Depending on your nonprofit’s activities and location, you may need to obtain various licenses and permits to operate legally—research local, state, and federal requirements and apply for any necessary licenses and permits. Be sure to maintain compliance by renewing licenses and permits as needed and staying up-to-date on any regulation changes.

Step 8: Develop a Fundraising Plan and Strategy

Fundraising is critical to the success of your Tennessee nonprofit corporation, providing the financial resources needed to carry out your mission and programs. Develop a comprehensive fundraising plan that outlines your goals, strategies, and timelines for raising funds. This plan should include various funding sources, such as grants, donations, and special events. Create marketing materials and strategies to promote your nonprofit’s fundraising efforts and engage potential supporters.

Step 9: Open a Bank Account for the Nonprofit

With your legal and financial foundations in place, it’s time to open a bank account for your nonprofit corporation. Choose a bank that offers services tailored to nonprofits and provides the features and support your organization needs. To open an account, you’ll typically need to provide your EIN, Charter for Profit Corporation, bylaws, and a resolution authorizing the account opening. Establish proper financial controls and procedures to ensure responsible management of the organization’s funds.

You can check out the Tennessee Best Banks to know which bank will suit your nonprofit corporation.

Step 10: Establish Record-Keeping Systems

Effective record-keeping and reporting are essential for maintaining your nonprofit’s legal and financial compliance and demonstrating transparency and accountability to your supporters. Set up systems for tracking financial transactions, maintaining records of your organization’s activities, and reporting to the IRS, state, and other relevant agencies. Stay up-to-date on reporting requirements and deadlines to ensure your nonprofit remains in good standing. Hiring a CPA in Tennessee for this reporting system is best.

Step 11: Launch and Promote the Nonprofit

With your Tennessee nonprofit corporation officially established and your financial and legal foundations in place, it’s time to launch your organization and begin making a difference in your community. Develop a marketing plan to promote your nonprofit’s mission and services, including creating a website, social media presence, and other marketing materials. Network with other nonprofits, community organizations, and stakeholders to build partnerships and collaborations to strengthen your organization’s impact.

Step 12: Ongoing Compliance and Management

Starting a nonprofit corporation is just the beginning – maintaining your organization’s legal and financial compliance is an ongoing responsibility. Stay informed about changes in nonprofit laws and regulations, file required Annual Reports and financial statements, and regularly review and update your bylaws, policies, and procedures as needed. Foster positive relationships with board members, volunteers, and supporters to ensure your nonprofit’s continued success.

Cost of Forming a Nonprofit Corporation in Tennessee

In forming a nonprofit corporation in Tennessee, the filing and Annual fees must be paid. Without it, your nonprofit corporation won’t operate. In Tennessee, the nonprofit costs $100 for online and by mail filing, and should file an Annual Report. You should ensure you comply with all the necessary fees and costs so your Tennessee nonprofit corporation will run successfully and smoothly.

Is Forming a Nonprofit Corporation in Tennessee Worth It?

Forming a nonprofit corporation in Tennessee can be worth it if you are dedicated to a specific cause and prepared to meet the challenges and responsibilities of running a nonprofit organization. It is essential to carefully consider your goals and resources and consult with a Business Attorney in Tennessee or other professionals experienced in nonprofit formation and management to ensure that you are making the best decision for your situation.

FAQs

What forms do I need to file to start a non-profit corporation in Tennessee?
You will need to file the articles of incorporation with the Tennessee Secretary of State’s office.
How long does it take to get approval for a non-profit corporation in Tennessee?
Approval typically takes around two weeks in Tennessee, but it can take longer if there are errors or omissions in the articles of incorporation.
Do I need to register my non-profit corporation with the state of Tennessee?
Yes, you must file your articles of incorporation with the Tennessee Secretary of State’s office to register your non-profit corporation.
How much does it cost to start a non-profit corporation in Tennessee?
The filing fee for articles of incorporation is $50 for non-profit corporations in Tennessee.
Can I have paid staff in my Tennessee non-profit?
Yes, you can have paid staff in your Tennessee non-profit.
Where can I obtain a form to file my articles of incorporation in Tennessee?
You can obtain the form to file your articles of incorporation from the Tennessee Secretary of State’s office or online via their website.
Do I need a lawyer to start a non-profit corporation in Tennessee?
No, you do not need a lawyer to start a non-profit corporation in Tennessee, but you may choose to work with one to ensure all legal requirements are met.
What is the minimum number of directors required for a non-profit corporation in Tennessee?
You need at least three directors for a non-profit corporation in Tennessee.
Can I change the name of my non-profit corporation after it has been incorporated in Tennessee?
Yes, you can change the name of your non-profit corporation by filing an amendment with the Tennessee Secretary of State.
Is there a time limit for when I need to file my articles of incorporation once I have started my non-profit in Tennessee?
No, there is no time limit for filing your articles of incorporation once you have started your non-profit in Tennessee.
Can I create a non-profit corporation for personal or family gain in Tennessee?
No, a non-profit corporation in Tennessee can only operate for charitable or other exempt purposes.
Where can I go for help with starting a non-profit corporation in Tennessee?
You can seek help from the Tennessee Secretary of State’s office or consult with an attorney.
Do I have to have a physical office address for my Tennessee non-profit corporation?
Yes, every non-profit corporation in Tennessee must have a physical office address.
How do I create bylaws for my non-profit corporation in Tennessee?
You can write your own bylaws or work with an attorney to create them for your non-profit corporation in Tennessee.
Can I start a non-profit corporation in Tennessee if I am not a resident of the state?
Yes, you can start a non-profit corporation in Tennessee even if you are not a resident of the state.
Will my Tennessee non-profit corporation be exempt from paying taxes?
Your Tennessee non-profit corporation may qualify for an exemption from federal and state taxes, but you will need to apply for this exemption.
Do I have to have a board of directors for my non-profit corporation in Tennessee?
Yes, every non-profit corporation in Tennessee must have a board of directors.
Can I get a state tax exemption for my non-profit corporation in Tennessee?
Yes, you may apply for a state tax exemption for your non-profit corporation in Tennessee.
What duties do the directors of a non-profit corporation in Tennessee have?
The directors of a non-profit corporation in Tennessee are responsible for making major decisions, selecting and evaluating officers, and ensuring the non-profit adheres to its mission.
Can I get a federal tax exemption for my non-profit corporation in Tennessee?
Yes, your non-profit corporation in Tennessee can apply for a federal tax exemption as a 501(c)(3) organization.
Do I have to hold annual meetings for my non-profit corporation in Tennessee?
Yes, you are required to hold regular meetings for your non-profit corporation in Tennessee.
What is required on the articles of incorporation for a non-profit corporation in Tennessee?
The articles of incorporation for a non-profit corporation in Tennessee must include the name and address of the corporation, the purpose of the corporation, and the names and addresses of the initial directors.
Can I start a non-profit corporation in Tennessee for any type of charitable work?
Yes, you can start a non-profit corporation in Tennessee for any type of charitable work, as long as it meets the legal requirements.
What is the process for dissolving a non-profit corporation in Tennessee?
You must file a certificate of dissolution with the Tennessee Secretary of State’s office to dissolve a non-profit corporation in Tennessee.
Can I start a non-profit corporation in Tennessee for political activities?
No, non-profit corporations in Tennessee cannot engage in political activities.
Do I need to get a business license for my non-profit corporation in Tennessee?
No, non-profit corporations in Tennessee are generally not required to get a business license.
How do I properly register to solicit funds as a non-profit corporation in Tennessee?
You must register to solicit funds in Tennessee by filing an application with the Division of Charitable Solicitations and Gaming.
How much does it cost to obtain a state tax exemption for my non-profit corporation in Tennessee?
The cost to obtain a state tax exemption for your non-profit corporation in Tennessee is $100.
What are the basic steps for starting a non-profit corporation in Tennessee?
The first step is to choose a unique business name and file your Certificate of Incorporation with the State of Tennessee. You also need to obtain a federal Employer Identification Number (EIN) and apply for state and federal tax-exempt status.
What are the requirements for incorporating a non-profit in Tennessee?
You’ll need to file a Certificate of Incorporation with the Tennessee Secretary of State’s office. The Certificate must include a specific purpose statement, the corporation’s name and address, a listing of the initial directors, and the name and signature of the initial registered agent.
Does Tennessee law require a non-profit corporation to have a board of directors?
Yes, under Tennessee law, a non-profit corporation must have a Board of Directors.
What is the role of a board of directors in a non-profit?
The Board hires and evaluates the executive director, approves the budget, sets and manages strategic priorities, establishes policies and procedures, and ensures the organization stays true to its mission.
What type of non-profit organizations can be formed in Tennessee?
Tennessee law allows for religious, educational, charitable, and social welfare non-profit organizations.
Can a non-profit in Tennessee engage in political activity?
Supporting or opposing political candidates is generally prohibited. Non-profits can, however, take part in political advocacy so long as it aligns with the organization’s core mission.
Can foreign non-profits doing business in Tennessee obtain tax-exempt status?
Non-resident foreign corporations may register for Tennessee tax purposes and apply for tax-exemption if they meet qualifications under the Internal Revenue Code.
Does Tennessee require non-profits to register with the state?
Yes, Tennessee requires all non-profit organizations to register with the Charitable Solicitations Division of the Secretary of State’s office.
What are the general filing fees for incorporating a non-profit organization in Tennessee?
The filing fee for a Certificate of Incorporation in Tennessee is $100.
How long does it typically take to form a non-profit corporation in Tennessee?
It usually takes around 3-4 weeks for the state to process the Certificate of Incorporation.
Can non-profit corporations hold fundraisers in Tennessee?
Yes, non-profit corporations that register with the state can engage in fundraising activities, as long as it is in compliance with state regulations.
What types of benefits can a non-profit corporation offer to employees?
Non-profit organizations are free to offer the same employment benefits offered by for-profit companies, such as health insurance and retirement plans.
What is required of philanthropic foundations in Tennessee?
Philanthropic foundations must apply for an IRS ruling and operate exclusively for charitable, religious, and educational purposes.
Can a non-profit fund its startup from its own resources?
Yes, a non-profit is not limited in their use of their own resources to provide startup funding.
What is the process for securing tax status in Tennessee?
After obtaining an EIN, application for federal tax-exempt status(Most common forms for tax exemption is Form 1023 or 1024) can be done, which takes several months to process; followed by application for state tax-exempt status, which must also be done within 60 days with the Tennessee Department of Revenue.
Are there state reporting requirements for non-profit corporations in Tennessee?
Yes, every non-profit that is established in Tennessee must file an annual report with the Secretary of State’s office.
Can Tennessee revoke the status of a non-profit?
Yes, Tennessee can revoke the status of a non-profit entity if it causes harm to its employees or to the general public, the required reports or taxes are not paid, if it commits any misconduct or fraudulent activity, or if the entity dissolves.
What is the Registered Agent’s function?
The Registered Agent is an individual designated by the organization to receive legal communications and service of process in case anyone sues the entity.
Can corporate filings for non-profit organizations be done online?
Yes, organizations can file through the Tennessee Secretary of State’s website.
Can I start a non profit in Tennessee by myself?
Yes, one person can start a non-profit in Tennessee, but a board of directors and at least 3 officers are required.
How many directors can a non-profit have in Tennessee?
Tennessee requires a minimum of three directors for most non-profit corporations.
Does a not-for-profit corporation have to adhere to any tax regulations for financial transactions?
Yes, it must maintain tax-exempt status by complying with all state and federal tax laws.
Can members of non-profit corporations claim ownership or control over assets or finances?
Members of non-profit organizations do not have any economic or ownership rights to either the assets or finances.
Are there restrictions on assuming political connections or affiliations in non-profit activity in Tennessee?
Nonprofits may perform advocacy work related to issues that fall under the organization’s mission, but political endorsements of candidates or political lobbying efforts require receiving endorsements.
How can offices overseas, or with owners who reside oversease, establish a presence as a domestic non-profit through Tennessee?
Investigate state regulations, as there may be specific requirements such as registering with Tennessee, by the nonprofit mail identifier number (NMID).
Are there specific requirements or courses for starting a non-profit in Tennessee?
There is no specific coursework required for founding a nonprofit organization in Tennessee, but it’s necessary to form the corporation legally with a TAX ID (EIN).
How can a non-profit organization verify the legitimacy of a grant-making operation accepting an application in Tennessee?
The organization accepting an application for a grant should research the grant giving foundation or entity’s information so before applying, or explore best practices citing databases similar to guidance through the Foundation Center.
Can a corporate-entity such as an LLC or large established corporation form a non-profit arm?
Yes, there are opportunities for corporations and LLCs to establish a charitable branch of their general enterprise.
Can physical work such as handing out newspapers or tutoring children for free be counted towards community service in Tennessee non-profits?
Physical work counts as community service in Tennessee, both likely alongside others non-monetary aid/charity work not given monetary compensation for would be expected.
Is it necessary for non-profits exclusively engaging in volunteer work to adhere to their own legal requirements and filings?
Yes, filing Charitable Solicitations division it is necessary for the non-profit even if primarily volunteer-based to have legal status.

Also Read

Why You Should Start Tennessee Nonprofit

One of the main reasons why you should consider starting a nonprofit in Tennessee is the opportunity to address local needs and make a positive impact on your community. There are countless issues facing society today, from poverty and homelessness to education and healthcare disparities. By starting a nonprofit, you can mobilize resources and create programs that directly address these issues, providing support and assistance to those who need it most.

Starting a nonprofit in Tennessee also allows you to be part of a close-knit community of like-minded individuals who share your passion for social change. Nonprofits often rely on volunteers, donors, and supporters to help them achieve their mission, and by starting your own organization, you can connect with others who are dedicated to making a difference. Together, you can work towards a common goal and create a stronger, more cohesive community.

Another reason to start a nonprofit in Tennessee is the potential for personal and professional growth. Running a nonprofit requires skills in leadership, management, fundraising, and communication, all of which can help you develop as a person and as a professional. By taking on the challenge of starting a nonprofit, you can hone your skills, build valuable experience, and expand your network, all of which can benefit you both personally and in your career.

Additionally, starting a nonprofit in Tennessee can provide you with a sense of fulfillment and purpose. Knowing that you are making a positive impact on your community and helping to improve the lives of others can be incredibly rewarding. Whether you are passionate about helping children, supporting the environment, or advocating for social justice, starting a nonprofit can allow you to channel your passion into meaningful action and see the tangible results of your efforts.

Finally, starting a nonprofit in Tennessee can be a way to leave a lasting legacy and create positive change for future generations. By building a sustainable organization that will continue to serve your community long after you are gone, you can ensure that your impact will be felt for years to come. Your nonprofit can become a beacon of hope and a source of support for those in need, leaving a lasting mark on the world and inspiring others to follow in your footsteps.

In conclusion, starting a nonprofit in Tennessee can be a fulfilling and rewarding experience that allows you to make a tangible difference in your community. By addressing local needs, connecting with like-minded individuals, building valuable skills, finding fulfillment, and leaving a lasting legacy, you can create positive change and help create a better future for all. So if you have a passion for social change and a desire to make a difference, why not consider starting a nonprofit in Tennessee today?

Conclusion

Starting a nonprofit corporation is a rewarding and challenging endeavor that requires careful planning, dedication, and a thorough understanding of the various legal and financial requirements. By following the steps outlined in this comprehensive guide, you’ll be well on your way to creating a nonprofit that makes a meaningful difference in your community. As you embark on this journey, remember to stay focused on your mission and your organization’s impact on the lives of those you serve. Never underestimate the power of a passionate, committed team working together to improve the world.

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